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Decoupling from the East Toward the West? Analyses of Spillovers to the Baltic Countries
Author:
International Monetary Fund
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Series:
IMF Working Papers
Volume/Issue:
Volume 2009: Issue 125
Language:
English
Publication Date:
01 Jun 2009
DOI:
https://doi.org/10.5089/9781451872729.001
ISBN:
9781451872729
ISSN:
1018-5941
Pages:
38
Keywords:
WP; GDP; Lithuania; Latvia; price
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper uses VAR models to examine the magnitude and sources of growth spillovers to the Baltics from key trading partners, as well asfrom the real effective exchange rate (REER). Our results show there are significant cross-country spillovers to the Baltics with those from the EU outweighing spillovers from Russia. Shocks to the REER generally depress growth in the Baltics, and this intensifies over time. We also find that financial and trade channels dominate the transmission of spillovers to the region which partly explains the realization of downside risks to the Baltics from the global slowdown.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund